When to Apply for Social Security?


Just because you can apply for Social Security retirement benefits at age 62 doesn’t necessarily mean you should. Although money isn’t the only consideration, waiting can substantially increase your monthly benefit payment. Life expectancy and retirement goals should also factor into making an informed decision. Regardless of which date you decide on, you should apply for benefits three months before you want to start collecting them, according to an article on MarketWatch.

Monthly Benefit Payments

  • Except for an occasional cost-of-living increase, the monthly benefit you qualify for at the start is the amount you’ll receive for the rest of your life. A number of websites, including the Social Security Administration site and Bankrate.com, have free calculators to help you estimate what your monthly benefit will be. The Bankrate calculator, for example, estimates your benefits based on your current age, when you plan to retire, your annual income, your expected salary increase and the expected rate of inflation.

Life Expectancy Considerations

  • Applying for Social Security at age 62 can might seem sensible if you have health concerns and don’t expect to live into your 80s. However, most people underestimate how long they are going to live, according to a Bankrate.com column by financial journalist Amy E. Buttell. Social Security Administration data show that about one of every four people turning 65 in 2014 will live past 90 years and one out every 10 people will live past 95 years of age. If your health is good and you come from a family with a history of living a long time, waiting to apply for your Social Security benefits can be a wise decision.

Men vs. Women

  • Because women have a longer life expectancy, a married man who waits to apply for retirement benefits will increase the amount his wife will receive if she applies for Social Security survivor benefits. A widow who applies for survivor benefits before full retirement age typically receives 71 percent to 99 percent of her husband’s basic benefit amount. A widow who applies for survivor benefits at full retirement age typically receives 100 percent of her husband’s basic benefit amount. This is especially important for a woman who either does not qualify for benefits on her own or qualifies for a lower monthly amount.

Retirement Plans

  • Retirement means different things to different people. For some people, retirement does not signify the end of the working life. If you apply for benefits before reaching full retirement age and continue working, the SSA will reduce your benefits by $1 for every $2 you earn above the current annual wage limit. In addition, depending on your annual income and filing status, you may be required to pay income tax on Social Security benefits. If you wait to apply until after you turn 70, however, there is no benefit reduction and usually no income tax obligation no matter how much you earn.


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